Elon Musk Comments On Failed Tesla Battery Swap

At the Tesla shareholder’s meeting, CEO Elon Musk responded to a question on the status of Tesla battery swapping. His response seems to indicate that battery swapping is dead (or extremely unpopular, at least), as Tesla Model S owners prefer Supercharging.

Here’s his response in its entirety:

“We have the LA-to-San Francisco pack swap capability in place, and I believe all Model S owners in the California area have been invited at this point to try it out. And what we’re seeing is a very low take rate for the pack swap station. So we did an initial round of invitations, where we did basically like 200 invitations, and I think there were a total of four or five people that wanted to do that, and they all did it just once. So, okay, it’s clearly not very popular. And then we said, okay, let’s expand that invitation to all customers, but I would expect that all customers roughly behave like that initial sample group.

It’s just, people don’t care about pack swap. The Superchargers are fast enough that if you’re driving from LA to San Francisco, and you start a trip at 9AM, by the time you get to, say, noon, you want to stop, and you want to stretch your legs, hit the restroom, grab a bite to eat, grab a coffee, and be on your way, and by that time, the car is charged and ready to go, and it’s free. So, it’s like, why would you do the pack swap? It doesn’t make much sense.

We built the pack swap into the car because we weren’t sure if people would want to choose the pack swap or not. We thought people would prefer Supercharging, but we weren’t sure, so that’s why we built the pack swap capability in. And based on what we’re seeing here, it’s unlikely to be something that’s worth expanding in the future, unless something changes.

For the Superchargers, as we said in the initial press release, the Superchargers are free. It’s basically free long distance for life, forever. So free long distance forever is what the Superchargers are providing. Now, there are a few people who are quite aggressively using it for local Supercharging, and we will sort of send them just a reminder note that it’s cool to do this occasionally, but it’s meant to be a long-distance thing. But it is free long distance forever, and it’s basically built into the cost of the car. And based on what we’re seeing in terms of the economics, it looks quite supportable.”

Yes, that is the biggest news here. Hasn’t it always been free supercharging for life without the long distance restriction? I understand the need for the restriction, especially as super chargers get located closer to where owners live and Teslas become more abundant. But it seems like a change in terms that will be difficult to enforce without limiting the number of free charging sessions per month or year. So if you live in a condo or location without overnight charging facilities, Tesla is looking less attractive long term.

Seems like a lot of people bashing the locals using the superchargers… what about the people that live in condos or apartments or high-rise that does not allow plugging in or an install of a charger… should those people not be allowed to buy a tesla?

I feel like this is probably more about the few folks who use them daily or multiple times a day for business purposes (e.g. Taxis and Ubers). I very much doubt this has anything to do with the 2/week apartment dweller. Tesla is not going to want it going around that these folks aren’t welcome.

Seems obvious… the rich want to dress in the Tesla to impress their friends… but the rich rarely get rich without being penny pinchers… so the monthly charges begin to gnaw at their cortexes… and the promise of anything with the four letters they love most… Free. They are a greedy funny bunch. Right up until the neighbors Tesla blocked my needly little, pauper’s LEAF from reaching the charger spot that it wasn’t even plugged into what with its enormous range and all…

Sheesh.
P.S. I love Teslas for all the wrong reasons… and am waiting for the RangeMaster Model S… 100kWh battery and every efficiency option… defrosting windscreen… transparent fender skirts in back… Aero 19″ wheels… air suspension, aftermarket camera rear view mirrors… smaller motors and programmable or auto governor on speed… 0-60 8 seconds… fast enough for most, etc… this is all in my head… but I would seriously want this. Can it go 400 miles? 425?

I too find it rather surprising that Tesla is trying to restrict “abuse” of the Supercharger system for local charging. Didn’t Tesla plan for such activity? It’s human nature; some people will go out of their way to ridiculous lengths to get something “free”.

Tesla advertises Supercharger use as “fre for life” after the initial fee is paid. Unless Tesla put something in the purchase agreement restricting local use, then their attempts to restrict that are not only bad publicity, they also are contrary to law.

Please note I am not saying I approve of Tesla Model S owners who use the Superchargers as a replacement for everyday charging at home or work.

I’d be interested to know if there was any fine print associated with Supercharger use customers agreed to (unknowingly) upon purchase that would allow Tesla to restrict usage of Superchargers, if need be.

I bet $50 that Tesla is going to use electronic computer oppression to limit people with in 10 to 50 miles of a super charger from plugging in for free saying the supercharger has to be so and so distance from your house. Or so and so number of charges in a few weeks.

They are going to do this in that all the cheap skates of the world along with people who don’t have plugs at home took up Elon Musk’s Offer for unlimited charging for $2000 dollars.

If you think about it if you drive 25 to 10 miles a day and a Tesla has a 270 mile battery range. I could in theory treat it like a gas car with the supercharger as your gas station.

I seriously doubt he was talking about the 1-2 times a week apartment/condo dweller type. They are talking about the N/day users who are using their cars to make money and using the SC as free fuel (e.g. Taxis and Ubers).

“They are talking about the N/day users who are using their cars to make money and using the SC as free fuel (e.g. Taxis and Ubers).”

There is nothing whatsoever in Musk’s comments or the article to suggest that Musk was complaining about using a Model S as a taxi, or that he thinks it’s inappropriate for taxis to use the Supercharger system. In fact, that would very much fit with Musk’s stated objective of ending use of fossil fuel to power transportation.

No, I agree Lensman. I think EVs like the model S would be great for taxis, police cars and other service vehicles. I only call them out based on the fact that using supercharging for those purposes would be a heavy use of the resource and I have seen “heresay” that it is happening in some areas.

If you are using your Model S as an Uber 80 hours a week and supercharging to do it, you are probably using it too much.

Well, there might well be a legitimate legal objection to using the Supercharger system for commercial use, which is what it would be for regularly using it to charge a taxi. I wouldn’t be at all surprised if there was something about non-commercial use in the fine print about using the Supercharger system; stipulation for “non-commercial use” is pretty common in user agreements.

But at least according to the article, the issue here is a probably growing number of freeloaders who are getting Tesla to pay for their everyday EV charging, probably on average no more than once or twice every week. Musk said nothing about taxis using Superchargers multiple times a day.

Even without the electricity charge, the depreciation per mile for a Model S is quite high, over a dollar. It wouldn’t make sense for any Uber driver to use a Model S, unless it is one of the Lux services. And then, there won’t be too many of those.
Same can be said of people who make frequent long distance trips. If they are driving their Model S to ground, then they at least deserve the free charge they paid for.

yes, an entirely pointless endeavour as a home charger can be installed for less. The only exception is people who park on-street and are unable to charge at home; for them, public charging is the ONLY option.

I have to disagree with you on that. My development was built without garages or driveways. All parking is on-street and there is no reserved parking. I can’t even be guaranteed a spot in front of my own house. Only those with handicapped plates or permits get a reserved space.

I asked the township zoning board about putting a charging ped in front of my house, and was greeted with a resounding “No”.

Unless I want to drape a charging cord across a public sidewalk, I’m SOL.

My employer has no intention of installing chargers at my location. In fact, our down-town office doesn’t even have a parking garage near by.

So I’m that one guy in a hundred who would need access to publicly accessible chargers along my commute route.

EV advocates are quite misguided with the “just charge overnight” mantra. Sadly, this is one area of real concern that I have for EV adoption that will push folks like you to gasoline or hydrogen.

Since virtually all current EV owners / advocates (even the ones without EVs… they’re out there) live at a place with parking and electrcity, and work “normal” jobs that may also have a place to plug in, those same people just can’t connect the dots that to displace gasoline and other fossil fuel derived alternatives like hydrogen, EVs must work for EVERYBODY much like the competition does.

To facilitate this, I propose a simple pay-to-charge plaza much like the current mega gasoline stations. That’s just what is being built in Encinitas, California with up to 12 DC chargers, with waiting by-the-minute electric car rentals, and Starbucks style coffee shop plus snacks and EV accessories.

I have a garage to charge my Volt but the second ICE car is parked on the street in front of the garage. If I had two EVs and need to charge both of them nightly, I wouldn’t be able to do it unless I install a 240V outlet in the garage and wake up in the middle of the night to swap EVs. There is no driveway in front of the garage, just the sidewalk, so I can’t just run a cable under the garage door to charge the second EV. Luckily, we commute to work by EV subway, and wouldn’t need to charge both EVs (if we had a second one) nightly.

That EV charging plaza that is being built in Encinitas sounds interesting. InsideEVs should do a story on it.

I seriously doubt Tesla would resort to something like that. However, I certainly could see repeat abusers being electronically limited to charging at the original 90 kw speed, instead of the 135 kw and even faster charging rates that will come in the future.

That would certainly honor any previous agreements to original purchasers who bought when there were 90 kw superchargers.

The rate limit will increase in the future and they could limit some or all cars for local charging but I think the “free charging” language has been around after cars started charging faster than 90KW.

On top of that I don’t think Tesla is interested in slowing charging for all users close to home. I think they’d save this for the absolute worst case offenders that are at the top of the use list by kWh. I bet there are less than 10 cars world wide that they care about.

Instead of blaming the owners who have paid upwards of $80K for the vehicles (with the cost of SC use included in the price), who are legally entitled to use the SC at their own determination, have you considered the fault on Tesla itself, for not having enough SC to accommodate the ever growing # of Tesla owners?

Tesla should not, and probably did not, anticipate the # of SC built some years ago should be good enough say, 5 years down the road, correct?

In fact, what EM is treading on, is a very dangerous territory. He can be sued and there were similar court case in precedent – Mobile Data Throttling on (Grandfathered at this point) Unlimited Data Plan. In short, mobile phone companies sold plans with unlimited data at 3G/4G speed (very fast), but found that its data network was significantly crippled as multimedia use increased (from just sending SMS text initially, to watching HD movies especially with the explosion of iPhones). Instead of the unlimited data at high speed, those with high data usage suddenly found themselves unable to access the network, or with speed so slow that they were unable to effectively use their phones (say, to watch movies, or play games, or video chat). FCC ruled against the phone companies, and so were various Court decisions.

IOW, the problem of SC is created by Tesla itself, and not a problem from any Tesla owner. To blame and (potentially) limit SC use for any Tesla owner who are entitled to unlimited use can be illegal!

I really think Tesla is being dishonest with saying that the superchargers are for long distance travel. When Tesla says you pay $2000 for the life of the car and can charge as much as you want then that is what is what it means. Now they are trying to say you can charge as much as you want but not with in hundred miles of your house.

This type of rule sounds like something one of the Animals from the Movie Animal Farm would say when things are not going their way.

I knew from day one that the Tesla Supercharger network was going to break apart in only three years from it being built. The Battery Swapping and the Superchargers were two of my three things that I predicted would not work for Tesla.

The reason why I think the free Superchargers were not going to to work is right now Tesla is building 2000 to 3000 cars every four weeks. They meanwhile are only opening up one new supercharger that at most could charge eight cars every week or two. In order for Tesla to keep up with demand for superchargers they are going to have to enlarge a lot of their superchargers stations to charge a minimum of 20 to maybe even 60 cars in one sitting.

The supercharger would most likely handle the bulk of it’s traffic between 6.00AM and 9.00PM most of time.

The local gas station in my area handles over a 1000 transactions a day and it sells 15,000 gallons of fuel in a day. But it is a eight pump station and everyone takes five minutes to fuel up. The gas station also gets the bulk of it’s business between 6.00AM and 9.PM even though it is open.

The theory I have is that a supercharger is going to have to be 20 to 40 stales to handle that kind of volume flowing though it. Or there will have to be several superchargers in one block.

Tesla isn’t being dishonest at all. People who act as if superchargers are for daily use are being dishonest.

From the very first presentation, Musk noted repeatedly that superchargers were a solution for long-distance travel. He never said they were for daily charging. The location of superchargers on highway rest stops at mid points between cities is exactly for this reason.

If people abuse supercharging then unlimited supercharging will end. Tesla cannot afford to pay for every mile driven by every car it makes, nor should it try. It’s that simple. Tesla will grandfather in existing owners, to avoid legal issues, but new owners will get mileage limits or something like that.

“…who can afford a Tesla and can’t afford the $20 bucks per month to fuel it?”

Ebeneezer Scrooge didn’t live in an unheated apartment and eat a poor man’s diet because he couldn’t afford to buy coal for the stove, or because he couldn’t afford to eat better. He did it because he was a miser and a cheap SOB.

Actually, it’s not “free” – and Elon Musk is utterly wrong in this regard.

He’s trying to use the word “FREE” to distance the company from those who are frequent SC users.

The FEE of using the SC is actually incorporated into the price of the vehicle itself. The owners are entitled to use the SC. Period. If there’s not enough SC available, that only means the failure on Tesla part to anticipate the actual # of SC needed at various locations.

If Tesla has taken the SC fee out of the sales price of Tesla, it wouldn’t have been sold at the current price.

“Actually, it’s not ‘free’ – and Elon Musk is utterly wrong in this regard.

“He’s trying to use the word ‘FREE’ to distance the company from those who are frequent SC users.”

The second part of that is 100% wrong. The first part is only technically true because there is an upfront fee to access the system. But after that, use is free.

If there is any misunderstanding here, it’s entirely the fault of Tesla and its hype. They advertise it as “free”, so they have no leg to stand on when people act as if that’s actually true. Tesla uses the Supercharger to help promote and advertise its sales of the Model S.

Tesla get lots of free publicity from people talking about or reporting on the Supercharger system. Well and good, but Tesla should be willing to accept the flip side of that; the flip side of increased expenses due to customers actually using the system as much as the advertising suggests they can.

I personally think that they are ready for this level of use and will continue to reap the benefit is the SCs as a marketing tool whose value far outweighs their cost.

The folks who are frothing about all this based on one little comment are the ones who seem to have a problem with the perception of others use of the system being unfair. Honestly, let the company worry about what it needs to be successful. Use the SCs and don’t worry about what’s “fair” or what others “should” do. Tesla is run by some fairly smart people. They’re going to figure all this out and it probably won’t affect anyone here.

I think there is room for a range of legitimate opinions here. I agree with what you say, but at the same time I can sympathize with Model S owners who are annoyed or frustrated at the thought that, when they’re waiting in line for a Supercharger stall, some of those people they’re waiting on are there not because they really need to use the Supercharger, but simply because they’re freeloaders who aren’t willing to pay their fair share for the electricity needed to power their PEV.

And this is why nothing should be free in life. If it is free, there is high chance of misuse. Extending this further, there will be those who only need a charge for 20 miles, but will charge 200 miles anyway as it is free.
The pay-as-you-go is the best approach. Those who need it will use it. The more they use, more they pay. Fair and square.

Next year we will hear Musk whining that “Supercharger was also a bad idea, just like the battery swap. We will make it a payment-based system”.

One thing is sure free pollution should not be free. You have people that have a gas barbecue and than you have those that burn oil in stoves and drive petrol cars or worse burn coal in wood pellet intended stoves and drive with diesel not even equipped with stop start even less with a filter. The day the fossil fuel companies, that promised free pollution forever, have to say sorry the more you pollute the more you have to pay, fair and square, they will be in for way more trouble.

There is nothing free about SuperCharging. There is a pretty high cover charge to get into that club.

The “Free” DCQC I use at the mall isn’t free either. It has a big sign over it with the local dealers name and almost everytime I use it, I get to play EV ambassador for the other shoppers who have questions.

The “Free” L2 at Beaujos gets me to come there and buy $100 worth of pizza and salad for my family.

I am just totally baffled by everyone worrying so much about stuff that’s “Free.” Let the companies that are paying for this “Free” charging figure out what’s best for their business. If you don’t like “Free” charging, don’t frequent those businesses. More parking and charging for the rest of us who get it.

None of this is free. Somebody is paying for it because they decided it was in the best interest to do so. Me getting a “Free” QC at the mall isn’t hurting you in any way or taking anything away from you so why the heck does it seem to upset folks so much.

The main reason Tesla made superchargers in the start is to support long distance travel and change the image of EVs from being short distance vehicles. The reason they made it “free” is to remove barriers to using the chargers and encourage owners to take more road trips. They did not make it “free” to save the owners on daily charging costs. They have never hinted or implied superchargers be used in such a way (they have recently added some inner-city superchargers for those without home charging, but that’s a different usage).

While you may say it is actually prepaid, it is the same idea of “free” condiments and napkins at a restaurant. You technically prepaid for it with your meal, but it is still frowned upon if you take a whole bunch for use at home. The idea is the same here.

I do not really understand it.
If the sc will become net energy positive, along with financial cooperation with business owners on who’s property the sc are on and who benefit from people who stop there to charge, drivers should be encouraged to sc at every opportunity.

Wait, the net positive does NOT mean the energy is free. Those solar panels still need to be paid for and amortized over time. Net positive means that the energy is carbon neutral (or negative), not that it’s >cost< negative. You are mixing two completely different metrics.

Nor does it mean the installation, management, and maintenance, and support of superchargers is free. Superchargers are a capital expense. The more Tesla spends on superchargers, the less it has available for assets like the gigafactory, service centers, stores, etc.

If a stall is occupied by somebody who lives around the block, that person is also unlikely to consume at that location, and thus will render the benefit to the lot owner moot. It degrades the supercharger value proposition to property owners.

Not only that, he is degrading the experience of someone on a long trip who needs to wait for the spot.

Tesla has factored in a cost of around $2,000 for superchargers over the lifetime of the car. This can only be true under certain assumptions. At $0.20 per kWh, $2,000 supports around 110 full 85kWh charges, which is 30,000 miles. This is a reasonable average value. Many drivers will use less, others more.

But if you drive 150,000 miles on supercharging, the lifetime cost is $10,000, which is a real problem, especially as Tesla moves down the price spectrum.

The “$2000 for supercharging ” statement that is often used in these discussions is based on the mistaken belief that the $2000 SC activation fee for non-SC enabled cars=the cost of SC to Tesla. I would point out that the value of Super Chargers to Tesla is more related to marketing than any attempt to build infrastructure. The SC is an integral component of the Tesla purchase so any changes made to the current policies would be very measured and considered. It would be akin to a major structural or body change on the vehicle itself.

Perhaps it should have been just as “blindingly obvious” to Tesla that it should not have been so eager to promise unlimited free charging to those who were authorized to access the Supercharger network. Perhaps they should have put in certain restrictions from the start, to prevent abuse of the system. We all know that just a few people acting in a selfish manner can spoil something good for everyone; prudent planners take that into account and create rules to prevent it from the start; rules to prevent creating bad feelings by having to add restrictions to something already up and running.

I could see this coming years in advance. As the number of Tesla cars on the road continues to increase, there will inevitably come a point at which Tesla won’t be able to continue to offer unlimited free charging forever. If I could see it coming, as an outsider with no experience or expertise in financial matters, then Tesla certainly should have seen the same thing coming.

Of course, perhaps they did see it coming, and perhaps this complaint from Musk is just the first step in trying to stave off the inevitable as long as possible.

“it should not have been so eager to promise unlimited free charging… We all know that just a few people acting in a selfish manner can spoil something good for everyone.”

Do you see how these 2 statements contradict one another?

If Tesla promises (which I believe it does, or did) unlimited free charging, then what have those owner done for being selfish? They are just doing exactly what they were promised to – something they were entitled to do! They didn’t do anything extra at all.

They would be selfish if they were, say, told that they can charge between 12:00 am – 7:00 am, but these drivers refused to move their vehicles outside of those time, waiting for their next charging cycles to start again.

You’re confusing Superchargers with destination chargers. So far as I know, Superchargers are all on land owned or leased by Tesla. Essentially, from the viewpoint of zoning, they are small parking lots. Nearby businesses may benefit indirectly, but they don’t share expenses or profits with Tesla in any direct manner.

It certainly does suggest that Tesla should move to a fee-per-use for the Model ≡. But whether or not that’s actually a good idea depends on just how much of a financial drag on the system these freeloaders are. If it’s only 1-2% or less of overall Supercharger use, then it’s almost certainly not worth the bother of charging a per-use fee just to discourage freeloading.

Instead I think they will limit supercharging to a certain number of charges or miles per year.

The right way to do that would be to make that limit work within 150 miles of your home.

So if you happen to be a good faith long-distance traveler who simply racks up a whole lot of miles on the road, the limit would not apply to you. That way, it would remain “free, forever”, for long-distance travel, as intended.

It would make more sense to me to limit the number of kWh you can get per month or per year, beyond which Tesla charges you a fee. Limiting use of the system to X number of times per year seems inappropriately arbitrary. Someone charging for 10 minutes, 15 times a year, won’t be as much a drain on the system, or create as much of an expense for Tesla, as someone who charges for 45 minutes 5 times per year.

The “within 150 miles” limit makes no sense to me. If you’re on the return leg of a long trip, why shouldn’t you be able to use a Supercharger 50 or 25 or even 10 miles away from your home, if that’s what you need to do to go as far as you need to go? You might not even be returning directly home; you may have some other stop to make first.

I’ve always said from the very beginning that battery-swapping was dumb. Yet for the longest time I’d hear people (both EV drivers and non-EV drivers) claim that battery swapping would be the savior to long-distance EV driving. It’s a novelty at best.

I always presumed that battery swap was merely to alleviate “charge time anxiety”, but would be very hard if not impossible to implement and manage practically, especially amongst different manufacturers.

I guess what we really want to fix the “refuel time” is ultra-capacitors… One day… ;o)

I still believe that what we need in order to fix 95% of the “fuel time” issue is education, primarily achieved through experience. As Musk said, if you leave at 9AM and drive until noon, most people are ready for a 20-minute pit stop. You leave home with a full charge, and then only need enough of a boost to get where you’re going (either your destination, or the next supercharger). No need to charge to 100%. No need to wait at all for 90% of your trips. It’s a completely different mindset than most people are used to.

Regarding supercaps, I don’t think we will ever see a car powered by them. At best we will get charge times down to 10-15 minutes (for an 80% charge), and the difference between 5 minutes and 10-15 minutes approaches meaningless.

On a similar note, I’ve had to educate lots of people about fast charging on the Nissan Leaf. People complain that even 25 minutes is too long. But then I explain I have never spent more than 10 minutes at a fast charge station, and usually it is more like 5 minutes. This is for 2 reasons.

1) I never arrive at the station completely drained.
2) I never need to charge all the way up.

So, 5 minutes is usually enough to supplement my range to get me home.

I don’t think a supercapacitor-powered BEV is a realistic goal; it would take something on the order of 100 x improvement in the energy density of supercaps for that to be practical.

On the other hand, getting BEV charge time down to the range of 10 minutes or less is a realistic goal, and the Chief Technical Officer of Tesla has already stated they want to get it down to the range of 5 to 10 minutes.

We’re going to have to see significant improvement in batteries before EVs can be super-fast-charged, but competition will inevitably drive shorter and shorter charge times until that is achieved.

I can’t speak to others, but I always though of battery swapping as a way to address skeptics that continually request that 5 minute refueling, but that in reality something like superchargers already adequately addresses to recharging on long distance trips.

Battery swapping can be used to convince non EV owners that you can refuel it in less time than a regular car. But once they own an EV, they won’t feel the need to actually use the service. Especially with long range EVs with supercharging ability.

A distraction caused by a market distortion. Tesla will figure out how to get the number of swaps needed to earn the extra credits and you’ll see the swap stations closed immediately thereafter.

It will be cheaper to give away swaps (price point discovery) than to lose the credits. Even then, it will be a tough sell.

Look for a battery upgrade offer thrown in for good measure. Harris Ranch is an inconvenient place to have your car serviced, but at the right price, people will make the drive. Alternately, look for a swap station to be placed on a major corridor like SD – LA or SF-SJ. Maybe even in Fremont, where rent would be cheap and the inevitable swap problems quickly fixed.

Tesla is not going to allow every user of the battery swap station to permanently upgrade their battery pack, without charging a stiff fee for that. Tesla clearly stated very early on, in talking about battery swapping, that if you don’t swap your own original battery pack back in, they will bill you for the difference in value.

Sure, if Tesla were to offer a battery upgrade for a mere $40, then they would get massive response. But it would be a massive money loser for Tesla to do so, and I seriously doubt Tesla is run by people insane enough to do that.

Maybe I should have spelled it out more clearly. I didn’t intend to imply that I thought Tesla would allow people to upgrade their battery for $80.

See Tony Williams’ comments for the rationale behind devising a way to get Model S drivers to use the swap,

Assume that the vast majority of Model S drivers don’t want to swap out the largest, most complex, most expensive component on their car as a method of refueling.

Imagine you could get an $80 million dollar bonus if you could figure out a way to get them all to swap once.

I wasn’t aware of the one year constraint, so maybe that’s a deal killer.

But if you could offer a battery upgrade (say from 85kWh to 100kWh, or from 60kWh to 85kWh) with fast, mostly automated swap for a reasonable price, a lot of Tesla owners would probably take you up on the offer.

At some point Tesla wants that kind of capability anyway. Just one more major disruption of the automotive service model, that financial markets would continue to reward. Better than Jiffy Lube.

You’ll note that the 85kWh car is considered a “300 mile” range car by CARB. You’ll also note that the 40kWh Model S was not only unpopular in sales, it was only worth 3 credits (same as a Nissan LEAF, BMW i3, Fiat 500e, GM Spark EV, Honda Fit EV, Ford Focus Electric, Mercedes B-Class ED, VW eGolf and Toyota RAV4 EV) without battery swapping, and 4 credits with it.

Needless to say, the 40kWh Model S had a LOT of cards stacked against it. What would be interesting to learn is that since the cars were built with 60kWh batteries (with 208 mile EPA / 250-ish CARB ratings), did they count as 100-199 mile cars for CARB, or 200-299 mile cars?

Battery swapping was never truly intended to be a “thing”, beyond a demonstration and cash cow. They did do a demonstration for CARB to show that they could do it, which got Tesla qualified to claim the “fast fueling” credit on EVERY Model S that they produced.

Tesla has earned over $500 million in CARB-ZEV credits. They know how to milk the cow!

NOTE: “fast refueling” has been eliminated (2014), which more accurately addresses the “why no battery swap stations”. The fact that 4-5 people actually used it is a convenient fact that overlooks the real reasons. If the “fast refueling” credit was still available, they wouldn’t care if only 4-5 people used it !!! You’d have as many battery swap stations required to earn the credit.

In the real world, as I stated above, I believe that Tesla’s solution today is fast enough for all but the most ardent road warriors. After driving 200+ miles (3+ hours), a 20-minute break is most welcome anyway.

Brian, the answer is, “the ability to refuel to 95 percent of full capacity within 15 minutes or less.”

zev14isor.pdf

page 21 of 37

F. Fast Refueling Definition

The Board approved amendments to the ZEV Regulation in 2001 establishing the Type III and Type IV ZEV definitions and the Type V ZEV definition was added in 2008. These definitions provide more credit for ZEVs that have the ability to refuel to 95 percent of full capacity within 15 minutes or less. Table 4 below shows the credits each of these types earn in the pre-2018 model years.

Table 4: [edit: table removed]

Prior to the amendments that went into effect in July 2014, some BEVs qualified under the fast refueling definition because of their potential for battery exchanges. However, it was not evident that battery exchanges were actually taking place. Accordingly, ARB amended the ZEV Regulation in 2014 to require a showing of actual fast refueling events (e.g., actual battery exchanges) for such credits and require that manufacturers seeking to earn fast refueling credits submit the number of fast refueling events that occur over a 12-month period for all otherwise eligible vehicles in the vehicle fleet. No more than 25 fast refueling events can be attributed to a single vehicle; the number of fast refueling events cannot exceed the total number of vehicles in the vehicle fleet and the fast refueling events must be within the first year of placement. The data submission requirement does not apply to manufacturers of fuel cell electric vehicles (FCEV), because all miles are attributed to fast refueling hydrogen fueling stations.

Comments received both before and after the October 2013 Board Hearing reflected concerns that vehicles placed in the latter part of a model year would not be able to count fast refueling events after the calendar year had ended. Under the scenario proposed by the manufacturers, a 2015 model year BEV placed in service on October 31, 2015 would only be able to count those fast refueling events that occurred between October 31 and December 31, 2015. This was not staff’s intent, and so staff is now proposing to clarify that fast refueling events occurring during the initial 12-month period following the vehicle’s placement in California would qualify for the fast refueling credit. For example, a 2015 model year BEV placed in service on October 31, 2015 would be able to count all fast refueling events occurring during the period from October 31, 2015 through October 30, 2016.

“the ability to refuel to 95 percent of full capacity within 15 minutes or less.”

“requirement does not apply to manufacturers of fuel cell electric vehicles (FCEV), because all miles are attributed to fast refueling hydrogen fueling stations.”

You can imagine who actually wrote these rules that exempt hydrogen and specifically penalize battery electrics. The rule could have been PROPERLY written to say “XXX miles in 15 minutes”, because if the vehicle had a large battery, it would take longer to recharge.

In other words, a 500 mile capable battery only car might be able to provide 300 CARB miles of range in 15 minutes of recharging, but the battery is only two thirds full, so it doesn’t meet the 95% standard.

Any fast charge on any current design battery must slow down as it gets closer to full. It’s currently not possible to go at the same recharge rate at 1% State of Charge and also 95% State of Charge.

Tony Williams said: “NOTE: “fast refueling” has been eliminated (2014), which more accurately addresses the “why no battery swap stations”. The fact that 4-5 people actually used it is a convenient fact that overlooks the real reasons. If the “fast refueling” credit was still available, they wouldn’t care if only 4-5 people used it !!! You’d have as many battery swap stations required to earn the credit.”

CARB did not eliminate the “fast refueling” extra credit. CARB changed the rule and added a “requirement for automakers to actually document fast refueling events in order to qualify for the extra credits. Automakers had to prove that they had performed one fast refueling event per vehicle earning the extra credits, although they were allowed to perform as many as 25 rapid refueling events per vehicle in order to meet the fleet-wide goal.” So now theoretically, if 4% of new Tesla EVs each do 25 battery swaps the entire Tesla fleet gets the extra CARB credits for fast fueling.

Musk said: “So we did an initial round of invitations, where we did basically like 200 invitations, and I think there were a total of four or five people that wanted to do that, and they all did it just once.”

In this thread on TeslaMotorsForum, MITE46 is one of those four of five people and he claims to have battery swapped multiple times and does it frequently.

Musk said: “We have the LA-to-San Francisco pack swap capability in place, and I believe all Model S owners in the California area have been invited at this point to try it out. And what we’re seeing is a very low take rate for the pack swap station.”

The second round of invitations were sent out about a week ago, at the beginning of June. Isn’t it a little premature to say that Tesla is seeing a very low take rate?

At least one commenter on the TeslaMotorClub forum is having trouble finding an open appointment slot. Yesterday, this commenter said “Maybe it was only 4 of their first 200 invites, but I’m doing it next month and was challenged to find an appointment spot availability on the days I had preferred… (they have slots from ~9am to ~5pm weekdays).”

“In this thread on TeslaMotorsForum, MITE46 is one of those four of five people and he claims to have battery swapped multiple times and does it frequently.”

This wouldn’t be the first time that some of the details Musk gave out about Tesla and its cars turned out to be factually incorrect. Hey, the guy has a lot on his plate, what with running both Tesla Motors and SpaceX. Of course, that doesn’t excuse Musk’s habit of publicly communicating rather more freely than is prudent for a top executive. He really should defer more questions to his aides and subordinates at Tesla.

You have to be pretty deep in the Tesla Kool-Aid punch bowl to not see exactly what this is.

1) CARB is giving out lots of ZEV credits for cars with battery-swap capability
2) Tesla touts Model S battery-swap capability and promotes it as the wave of the future
3) Battery-swap ZEV credits go away
4) Battery-swap stations become a “lower priority” for Tesla
5) Years later, Tesla finally opens one single battery-swap station with limited access
6) Tesla immediately declares that people are “uninterested in battery swapping” and moves on

I bet if CARB reactivated battery-swap ZEV credits, The People would suddenly gain a lot more interest in battery swapping!

“NOTE: “fast refueling” has been eliminated (2014), which more accurately addresses the “why no battery swap stations”. The fact that 4-5 people actually used it is a convenient fact that overlooks the real reasons. If the “fast refueling” credit was still available, they wouldn’t care if only 4-5 people used it !!! You’d have as many battery swap stations required to earn the credit.“

No, they didn’t. I said read Tony Williams comments (plural), not just his first comment. If you read his second comment and his response to my comment, then you would know that CARB did not eliminate the “fast fueling” extra credit. CARB amended the rule and added a requirement for automakers to actually document fast refueling events in order to qualify for the extra credits.

Tony Williams’ second comment quoted CARB:

“Prior to the amendments that went into effect in July 2014, some BEVs qualified under the fast refueling definition because of their potential for battery exchanges. However, it was not evident that battery exchanges were actually taking place. Accordingly, ARB amended the ZEV Regulation in 2014 to require a showing of actual fast refueling events (e.g., actual battery exchanges) for such credits and require that manufacturers seeking to earn fast refueling credits submit the number of fast refueling events that occur over a 12-month period for all otherwise eligible vehicles in the vehicle fleet. No more than 25 fast refueling events can be attributed to a single vehicle; the number of fast refueling events cannot exceed the total number of vehicles in the vehicle fleet and the fast refueling events must be within the first year of placement.”

So theoretically, if 4% of new Tesla EVs each do 25 battery swaps the entire Tesla fleet gets the extra CARB credits for fast fueling. The article below explains the rule change in far greater detail:

P.S.: Spider Dan, you responded to a comment of mine in another thread and stated “You’re the second person in the last week I’ve seen cite “$0.20/kWh” as some sort of average electricity rate in the Northeast. I asked for references last time and got nothing.” FYI, I gave a link to the electric rates in the very comment that you responded to. It’s the link that comes right after I said “Electric rates by state:” 😉

If Tesla wanted the credit, they could easily identify 4% of the fleet (not sure if that’s the fleet registered in California, or in Secrion 177 states, or nationwide, or worldwide) that they could PAY to do 25 battery swaps, if the additional credit was deemed that valuable.

But, I suspect that they foresee:

1) The former $4000 per credit market price will fall in the future

2) Tesla never needed to earn ANY of the ZEV credits anyway, so market value is the only metric driving decisions

3) Let’s presume Tesla paid $100 per swap, multiplied by 25 equals $2500 (don’t pay anything until number 25 is in the bag) multiplied by 4% of 30,000 California cars (1200 cars) is a total of only $3 million.

Chump change compared to the CURRENT value of ZEV credits. Add a few million to actually operate one or two swap stations for a total of $5 million.

… and they sell 20,000 cars in California this year. That’s $80 million at $4000 per credit !!! That’s a seriously good investment !!!

But, it would also be painfully obvious that they were still gaming the system, as they have been all along. When the rule changes, Tesla changes their activity to reflect that new change in a way that benefits them.

The reality is that they aren’t close to confident that they can get the 1200 cars * 25 battery swaps = 30,000 battery swap events IN ONE YEAR.

Not even close, even if they paid. 4-6 swaps performed versus the 30,000 required.

So, battery swapping credit is dead for Tesla due to the CARB rule changes of 2014, and henceforth, the swapping will end.

Tesla has always been quite clear that they never expected swapping to be the end game. Batteries would improve to the point that they will be cheaper, bigger, and charge faster (more miles per minute charging), making swapping moot.

The swapping facilities are expensive (lots of expensive stored batteries plus labor, a building and equipment) that just isn’t required of Superchargers with free land use for ten years.

Better Place learned this lesson the hard way, and went out of business.

Battery swapping can only work if all mfrs used a universal battery pack. Then you’d have common hardware, and the critical mass of customers to make a viable business case. But even then, quick charging makes battery swapping a moot option.

On the other hand there was a possibility for a Model S 40 KWh equipped with an i3 type Rex. That would have been very useful to many and much cheaper than a Model S 85 KWh. The Rex could be of a better more compact type and run on biofuel since it would almost never be used the volume of needed fuel would be marginal compared with todays full gasoline cars. Of course that would have broken the 100% mantra but way more people would be driving an S today, because of the lower start price. Beside what’s wrong with a little renewable biofuel when it is made from cellulosic waste instead of food crops.

Having a fuel that is virtually impossible to find doesn’t seem like a logical solution. Any product like that would likely just be fueled with gasoline or diesel.

Supporting the fossil fuel industry, and redesigning the vehicle to compensate for fossil fuel burning seems silly. This arguement reminds me of the hydrogen promoters… “we can get clean hydrogen from (fill in blank with ever increasingly expensive and unlikely product) and we don’t need charging infrastructure or batteries.”

There’s oodles of room under the hood to put any fossil fuel burning device that you want. Why don’t you build this (or finance its build) if it’s such a good idea?

Actually E85 is not that rare and 15% gasoline in 85% in Ethanol of only 5% fuel use remaining would be less than a minor concession to fossil fuel compared with the countless people that now are using 100% fossil fuel vehicle as the result of no choice.
The vehicle doesn’t need to be a Model S but the 40 KWh would have been easy to equip with a Rex in the back.
As for doing it for real you need a money jolt and much luck to succeed in starting a new car company. While on the Model S 40 KWh it would have just take Tesla agreeing continuing the 40 KWh with the addition of a Rex.
But I don’t blame them, they do what they do, it is just that it was an interesting extra opportunity very hard to get starting from any other vehicle.

That is certainly where we are going but in the mean time 99% of the people can’t afford it. They will have to wait for a longer range Leaf or an affordable Model 3 in 2017 or 2018. A micro Rex on a base EV (different than an hybrid) could have been here since a long time ago. 2000 or even before. That is what the oilies know and they are really afraid off that scenario, not so much of 1% having a pure EV which can make it without a micro Rex. Of course many years later in 2018 they will be in for a big bang with affordable long range pure electrics but they will still try to delay those as well.

Gnah… if Tesla wants to restrict the SC usage, then they should do it only by positioning them away from cities. Reminder E-Mails will look like counting peanuts.

And the day they will use their software to place restrictions to abusers is the day people will start to worry about smart cars which are connected to the producer all the time. Media will go nuts for weeks…

Don’t blame the consumers who paid upward of $80K for a vehicle, and labeled them as cheapskates.

Blame the company who SOLD them the vehicles without thinking through the possibilities of how their offerings will be used, which, for whatever reason, didn’t specify any detail on anything in writing, and used the most optimal scenario, hoping for the best to happen.

There is plenty in writing about the intent and purpose of supercharging for long distance travel. It’s simply not true that the company never specified what supercharging was intended for. It did from the very beginning.

If by “in writing” you mean legally binding language, then that’s precisely the kind of attitude that’s the reason we can’t have nice things. The need to lawyer everything to death, as opposed to making a simple, good-faith reading of the obvious.

As for having spent 80K, so what? Since when does any car company give you free gas for buying costly cars? This is simply not a reasonable expectation. Tesla is providing a streamlined, simple solution to long-distance travel. You are advocating mucking it up because some people simply cannot handle being reasonable.

Alonso, I think you’re going to have a very hard time indeed citing any quote from any Tesla spokesman to justify any assertion you made in your first two paragraphs. In fact, in Googling [tesla supercharger terms of use] I stumbled across the following from a Tesla press release:

* * * * *
The technology at the heart of the Supercharger was developed internally and leverages the economies of scale of existing charging technology already used by the Model S, enabling Tesla to create the Supercharger device at minimal cost. The electricity used by the Supercharger comes from a solar carport system provided by SolarCity, which results in almost zero marginal energy cost after installation. Combining these two factors, Tesla is able to provide Model S owners1 free long distance travel indefinitely.

Each solar power system is designed to generate more energy from the sun over the course of a year than is consumed by Tesla vehicles using the Supercharger. This results in a slight net positive transfer of sunlight generated power back to the electricity grid.
* * * * *

So, not only did Tesla state very clearly that Supercharger use was meant to be unlimited from the start, they actually told people the electricity used wouldn’t cost Tesla anything because solar power would make it free!

Now, those of us who are scientifically literate know this is 99% B.S.; that even at those few Supercharger stations which actually have them, those relatively small solar canopies only produce a very small percentage of the electricity actually used at those Supercharger stations, and the power generated is a drop in the bucket compared to the power used by the entire system.

But again, why should we blame Tesla customers for actually believing what Tesla has told them, over and over and over again? Blaming customers for believing Tesla’s hype is rather unfair, innit? The responsibility for the consequences of Tesla’s hype rests with Tesla, not with its customers.

But it is correct when you read that it is intended for the cars that are using the superchargers, which are those in transit between a home charger and a remote final destination not at all the cars happening to be located in the neighborhood of a supercharger.
It is all in the way you read it and interpret it. Now of course Elon may be wrong when he things that writing a letter to those that abuse the system will solve the problem. But it may well be that people indeed stop abusing since they understand that the system will be in trouble if they go on abusing it. Eventually stopping altogether the car company they like the products off. So they would be kind of sawing the branch on which they are standing. So, most people are indeed likely to react positively and stop abusing. It is a bit like police asking to respect a speed limit, most will do it some will not sometimes, some will not most of the time but overall the majority observe the rule. If a few still abuse it is not right but the street will mostly be safe. Likewise if most people react positively and obey the rule of supercharger use for long distance, than the system will be safe. In a way we can even admit that some abuse since some that paid for it will almost never use it. Appartment dwellers are also not really abusing but rather a fraction of buyers that obviously need to supercharge most of the time or they simply don’t buy it. But on average they drive less since they live in the city. They could very well end up driving less on supercharger electricity than someone in the country using the superchargers rightfully for long distance but doing so more often in the car lifetime than the city guy. So all in all, lose a bit win a bit.

Done.
For ease, this is the link:http://www.greencarreports.com/news/1098658_life-with-tesla-model-s-local-supercharger-joys-frustrations
Quiet a story and really too bad for the drought and freeze.
But let concentrate on the core of it page 3:
“Using typical Model S energy-consumption figures of 325 Wh/mile and average electric rates of 11 cents/kWh, the electricity cost of running a Model S works out to about 3.5 cents per mile.
In effect, Model S owners with Supercharging capability have prepaid for 57,000 miles of Supercharged driving, on average.
Of the 43,000 miles currently on my odometer, I’m guessing about 10,000 have been Supercharged. The way I see it, then, it’s cool for me to Supercharge another 47,000 miles or so, long distance or not.
But I’m waiting for my reminder note from Tesla laying out the company’s side of the issue in more detail.
Let the debate begin.”

As explained above some will use superchargers a lot others not at all, but what is presented here as a kind of fair return on the prepaid 2000 $ is a wrong calculation. Indeed that is only taking into consideration the cost of the charged electricity but there are obviously other costs.
The second cost is the superchargers construction cost with permitting, architect, pouring concrete, installing the equipment.
The third cost is the building of the equipment with the technology cost for R&D since a supercharger is not an off the shelf product but at contrary a high tech product.
The fourth cost is the being first burden. Extra repairs, electric company initiation and existing site add on extra cost effect, except for brand new shopping center or hotel location where the second costs can be reduced by including it in from the start.
So we see more in detail that 2000 $ for the electricity is actually not right. It is rather 30 % for electricity, 30% for construction, 30% for equipment and R&D and 10% for the being first burden.
So that is only 600 $ worth of electricity on the hypothesis of the assumed average user usage. This is 17100 miles not 57000 miles. So 10000 miles used is already over half way the pretended average.
In the long run, either people understand the situation or the free will indeed have to change to another system that avoids opportunity charging problem. Either by increasing the 2000 $, by charging for locally supercharging or by yet another corrective measure for the new sales of Tesla vehicles.
This said I would be rather optimist because I think people will indeed react positively and because there are factors playing in favor of Tesla. When most of the building is done, that cost will come down drastically, the chargers R&D cost will continue but the cost of building the chargers will come down due to the larger production runs and the cost of being first is a onetime burden. Also the solar power cost will come down with better cheaper solar cells (especially build in house so to speak by Solar city) and finally Tesla will almost for sure at some moment license the use of its superchargers to some other brand car builder which will bring in further scale increase cost reductions and extra existing investment revenues. So Tesla will probably not have to increase the 2000 $ by much if at all.

I don’t understand Noland’s self proclaimed “war against his electric utility.” He’s paying a very reasonable 11 cent/kWh rate. I think he is just obsessed with zeroing out his bill with New Zero metering. By charging at a supercharger rather than his home, he is putting more stress on the grid and the electric company is making about the same amount of money, since he is just shifting who pays the utility for the electricity used to charge his Model S onto Tesla.

I think it would be very resonable for Tesla to limit us to 1 or 2 supercharging sessions per month within 20-25miles radius of your home. I charge primarily at home and have use supercharging only when traveling outside of my local metro area.

I don’t agree with you. It might be a contract dispute, but your chances of winning are small. There is plenty of evidence that Tesla intended the superchargers to be used for long distance travel. If you dont like it sue Tesla. Good luck with that.

I have to believe that “rich people” will stop abusing local superchargers when there are enough Teslas on the road to create a waiting line or slower charging rates due to all stations being in-use. They may be willing to save $3 with open stalls and 20 minutes of charging… but are they going to wait 20 minutes to plug-in + 20 minutes of charging to save $3? TBD

It’s like all you can eat buffets. Some people starve themselves all day so they can get their “money’s worth” at the buffet. It’s always the few that ruin things for the many. Cheapness and greed I suspect are the main forces behind these frequent superchargers.

If a restaurant advertises all-you-can-eat, and the said person (me likely) eat-all-I-can WITHOUT wasting 1 piece of food, then what have I done wrong?

I have not selfishly grabbed more than enough food on my plate, let it stay on my table, only to have the bus person trashes it. In the Tesla scenario, that will be similar someone hogging the spot, without charging.

If the restaurant can’t accommodate all the patrons with food available to everyone, then the restaurant should NOT have establish itself as a buffet restaurant to begin with.

Because non-buffet restaurant usually do have enough food of the same type for everyone.

Put the Supercharger and the battery swap station in the same location in the Ghetto and the swap station will get used more often.

The current location has both the swap and SC at Harris Ranch. Now who would turn down a meal at Harris Ranch and a quick desert from the small shop there? At a minimum you at least have to stand and inhale the outdoor “Aroma” there.

Then it sounds like once per week is probably completely OK with Tesla.

I wouldn’t think that the intent of free supercharging was ever to subsidize your taxi business. I don’t think you could ever claim that there was a “meeting of the minds” in any agreement that Tesla ever intended to subsidize your operation of your business through supercharging..

The auto makers (except Tesla) are pushing hard to get away from Zero Emission (ZEV) altogether, and instead have hybrids only. Then they don’t need charging infrasteucture or hydrogen research… just gasoline / diesel cars with some batteries and pollution.

The number of people who are bashing Tesla owners for “abusing” free Supercharging is almost shocking. (I say “almost” because one has to account for the base number of “Elon can do no wrong” Tesla fans.)

Some of these owners PAID $2000 for “lifetime” access to these Superchargers… and the rest bought a $90,000+ car. And now you’re saying that “lifetime” access means only when you’re driving really far? Absurd.

If the Supercharger sales model can’t hold up under the stress of Model S sales, how can it possibly hold up under the planned sales of Model 3?

If you are advertising something to be free and unlimited for life, you shouldn’t be surprised when people take you up on that offer.

Now, the superchargers aren’t really free, they are pre-paid. You pay $2000 upfront for the electricity you use over the life of the car. $2000 buys a lot of electricity but then again the life of the car is fairly long.

I think that the offer of unlimited electricity for life is a dangerous offer to make although it may have been necessary at the time it was made. I think for future models Tesla will change this offer and start to charge for SC access, as they should. SC is more than just electricity, it’s also convenience and paying for the electricity including a premium is probably worth it for long trips.

I expect that the “free” Supercharger offer will end with model X and for model 3 and forward you will have to pay every time you supercharge. It will still be worth it though, having access to a charging network that covers the whole of North America, the whole of Europe or large parts of Asia is well worth a premium as the alternative is to have to have memberships and smart cards with dozens or even hundreds of small incompatible networks all over the place.

I don’t like the Supercharger paradigm. Sounds too much like business as usual as with gas stations. I’m a freelance programmer. I get a client who wants something modified. The existing design is cr-p and I suggest a redesign that would work much better. But the client himself designed the original and he loves it. He says, “Can’t make any big changes. The people who use this are used to seeing it this way.” Nonsense. It’s the ugly baby syndrome. Tesla has to think outside the box. Superchargers is the same old box. I’m not saying “same old” is always bad. But “this is what they’re used to” is not a good reason to continue. To H with what they’re used to. Do it right, whether they like it or not. Just be sure to hit the target.

On unlimited charging:
Often policy/statements are written by companies, governments, writers, etc. that are incomplete. So some of the early supercharger adopters have found a loophole because the language was not clear. I don’t have a problem with notifying this group with your real intention, but at the same time, they should get a pass to do it. Now, Tesla simply corrects the language for new customers and you move forward. End of story.

On battery swapping and Tesla gaming the system:
Of course they were gaming the system, just as people over using the superchargers are gaming the system. Just as Toyota and Hyundai and Honda are gaming the system with fuel cells. I get pretty peeved at Toyota for a lot of their misdirection, but never once spoke out against them gaming the system. Regulations, rules, warranties, etc. are written to direct a behavior. Getting mad at Toyota or Tesla, or a Tesla customer for doing just that is a waste of time. Now many will say, “but this is not the intention”. Well, then the language needs to be altered.

I personally like CARBs response to correcting the language on battery swapping. I wish they would change the quick charge language to 80% opposed to 95% to better deal with today’s chemistry. I also wish they would make some corrections that deal with fuel cells. It is however, California’s and CARB’s prerogative to do so in the manner they see fit to produce the results they desire.

Agreed, regarding gaming the system. The term “gaming the system” is just pejorative for strategy. If CARB writes rules that create incentives to do something, corporations have a fiduciary duty to their shareholders to take advantage of the maximum amount of incentives and maximize their profit (capitalism). Blame the rule makers for writing badly thought out rules, not the companies that figure out a strategy to maximize the incentives they receive, or to comply with the rules with the least expense to the company.